1. Field of the Invention
The present invention relates to magnetic data storage, and more particularly to payment cards with magnetic data storage stripes that are able to re-write themselves.
2. Description of Related Art
Credit card and debit card use and systems have become ubiquitous throughout the world. Originally, credit cards simply carried raised numbers that were transferred to a carbon copy with a card-swiping machine. The merchant simply accepted any card presented. Spending limits and printed lists of lost/stolen cards were ineffective in preventing fraud and other financial losses. So merchants were required to telephone a transaction authorization center to get pre-approval of the transaction. These pre-approvals were initially required only for purchases above a certain threshold, but as time went on the amounts needing authorization dropped lower and lower. The volume of telephone traffic grew too great, and more automated authorization systems allowed faster, easier, and verified transactions. Magnetic stripes on the backs of these payment cards started to appear and that allowed computers to be used at both ends of the call.
The magnetic data on the stripe on the back of payment cards now contains a standardized format and encoding. The raised letters and numbers on the plastic cards are now rarely used or even read. This then gave rise to “skimming” devices that could be used by some unscrupulous merchant employees to electronically scan and save the information from many customers' cards. Reproducing an embossed card complete with photos is then rather easy.
A lot of new technologies are being proposed now to make credit and debit card use more secure at point-of-sale (POS) locations. Many propose the use of smart cards that wirelessly communicate two ways with merchant POS terminals. The data and authorizations are very secure, as it's encrypted and two-way, but the implementation worldwide would require the replacement of millions of magnetic-stripe card readers. Something that is very unlikely to happen anytime soon.
So, what is needed is a way to increase the security of payment card use at merchant POS locations, but not necessitate the deployment of new card scanners.